Bullish Channel for Gold Miners ETF

Just in case you want to see a real live example of channel analysis, the Market Vectors Gold Miners ETF (NYSE: GDX) is a textbook case. The enclosed 3-month uptrend has carved out a spectacular bullish channel, which we notice rocketed through the channel resistance line yesterday morning (above 58.55) prior to reversing back beneath the upper channel line.

In classic channel behavior, the GDX reversed from above to below the channel resistance line, and then continued to decline across the entire width of the channel right into the area of the lower channel support line (55.80), where it preserved the integrity of the channel, pivoting to the upside late yesterday afternoon.

Today's rally argues strongly from a technical perspective that yesterday's downside channel traverse in and of itself represented a completed near-term correction. If that is accurate, then the GDX has just started a new upleg that projects to new highs near 60 next. Only a decline that breaks the lower channel boundary at 55.90/80 compromises the still constructive technical and chart set-up.